April 3 - May 16, 2015
Curated by InLiquid
In light of recent world events and the upcoming mayoral and presidential elections, InLiquid’s artist members David Deakin, Cheryl Harper, and the collective Johnny Everyman will present works addressing political topics and themes concerning Philadelphia and beyond through various mediums.
The panel discussion on Wednesday, January 28th, is completely full. Unless you made a reservation, the event is closed.
Panel: Gavin Schmidt, Director of NASA Goddard Institute, and the artists Marcia Annenberg, Jeff Carpenter, Aviva Rahmani, and Simone Spicer, on the subject Art, Activism, and Global Warming.
Flomenhaft Gallery, 547 W. 27th Street, Floor 2, New York, NY
by ARI PHILLIPS on ClimateProgress
On Saturday, the federal government approved a major renewable energy
transmission line that could help open up the West to stranded solar and
wind assets and enable up to 3,000 megawatts of renewable energy —
enough to power over one million homes — to feed into the grid. The $2
billion project, overseen by SunZia, will span 515 miles across New Mexico
and Arizona, and support more than 6,000 jobs during construction and
more than 100 permanent jobs according to the Department of the Interior.
“SunZia will help carry New Mexico wind and solar to larger markets in the
West,” Mariel Nanasi, executive director of New Energy Economy, a New
Mexico-based clean energy and low-carbon economy advocacy
organization, told ThinkProgress. “There is so much possibility with the
advance of both utility scale and decentralized renewable energy
generation to displace fossil fuels that are threatening our climate, health
The SunZia Southwest Transmission Project, which will tap wind resources
in New Mexico and solar and geothermal in New Mexico and Arizona, was
proposed in 2009. In 2013 it encountered serious pushback from
Republican leaders in New Mexico who argued that the route could disrupt
the country’s national security efforts. New Mexico Gov. Susana Martinez
sent a letter to the DIO warning that the route could interfere with the
Army’s White Sands Missile Range. She argued that a 45-mile stretch of the
route interfered with a region where missiles were tested.
The Bureau of Land Management addressed these concerns, and in
working with the Department of Defense will now be burying three short
segments of the transmission lines as they pass near the missile range.
According to the DIO, the route also avoids major population centers,
cultural sites, highways, and pipelines where possible. The project includes
two parallel 500-kilovolt transmission lines and related facilities located on
federal, state and private lands.
U.S. Rep. Steve Pearce (R-NM), expressed continued disapproval of the
project, which passes through a portion of his district.
“Green-lighting the completion of SunZia along the chosen route is a
reckless rush to judgment without thorough examination,” he wrote. “It will
dramatically impair the mission of White Sands Missile Range to test
defense systems critical to the protection of our nation and troops.”
Pearce wrote that he is “extremely surprised” that U.S. Senator Martin
Heinrich (D-NM) and Rep. Ben Ray Luján (D-NM) would support the project,
which he argues would also destroy “sites fundamental to New Mexico’s
history and heritage.”
“I am taken aback by their support for crony corporate welfare at the
expense of our culture,” he said.
Pearce’s strong arguments against supporting renewable energy may have
something to do with his being supported heavily by the fossil fuel industry.
According to a 2013 report from Citizens for Responsibility and Ethics,
Pearce received the third most contributions of any congressional member
from the fracking industry between 2004 and 2012.
In his statement, Pearce does not mention the roles that domestic
renewable energy generation and improved grid infrastructure play in
national security. The electricity grid is vastly outdated and in need of
upgrading while renewable energy generation can reduce reliance heavypolluting
fossil fuels whose prices can spike and dip, disrupting stability.
Modernizing the electric grid not only helps incorporate the growth of
renewable energy sources, but also enables better smart grid technology
that can improve efficiency and reliability.
The Department of Defense has realized this risk and is heavily investing in
a variety of renewable energy projects. The Army has a “Net Zero Energy”
initiative that aims to produce as much energy as they use on bases. For
now, the U.S. military is the largest single consumer of energy and oil on the
planet and small shifts in fossil fuel prices can mean billions of dollars of
A note from JohnnyEveryman: Rep. Pearce was one of the 227 Republicans, out of 230, who voted in 2014 to cut the Pentagon's budget for researching and planning for the effects of climate change, a topic that the Pentagon sees as intrinsic to National Security, with its potential for famine and thus civil unrest, and the possibilty of lack of supplies, like oil.
Fleecing Pensioners to Save the Banks
The Detroit bankruptcy is looking suspiciously like the bail-in template originated by the G20’s Financial Stability Board in 2011, which exploded on the scene in Cyprus in 2013 and is now becoming the model globally. In Cyprus, the depositors were “bailed in” (stripped of a major portion of their deposits) to re-capitalize the banks. In Detroit, it is the municipal workers who are being bailed in, stripped of a major portion of their pensions to save the banks.
Bank of America Corp. and UBS AG have been given priority over other bankruptcy claimants, meaning chiefly the pensioners, for payments due on interest rate swaps they entered into with the city. Interest rate swaps – the exchange of interest rate payments between counterparties – are sold by Wall Street banks as a form of insurance, something municipal governments “should” do to protect their loans from an unanticipated increase in rates. Unlike ordinary insurance, however, swaps are actually just bets; and if the municipality loses the bet, it can owe the house, and owe big. The swap casino is almost entirely unregulated, and it is a rigged game that the house virtually always wins. Interest rate swaps are based on the LIBOR rate, which has now been proven to be manipulated by the rate-setting banks; and they werea major contributor to Detroit’s bankruptcy.
Derivative claims are considered “secured” because the players must post collateral to play. They get not just priority but “super-priority” in bankruptcy, meaning they go first before all others, a deal pushed through by Wall Street in the Bankruptcy Reform Act of 2005. Meanwhile, the municipal workers, whose pensions are theoretically protected under the Michigan Constitution, are classified as “unsecured” claimants who will get the scraps after the secured creditors put in their claims. The banking casino, it seems, trumps even the state constitution. The banks win and the workers lose once again.
Systemically Dangerous Institutions Are Moved to the Head of the Line
The argument for the super-priority of derivative claims is that nonpayment on these bets represents a “systemic risk” to the financial scheme. Derivative bets are cross-collateralized and are so inextricably entwined in a $600-plus trillion house of cards that the whole financial scheme could go down if the betting scheme were to collapse. Instead of banning or regulating this very risky casino, Congress has been persuaded by the masterminds of Wall Street that it needs to be preserved at all costs.
The same tortured logic has been used to justify the fact that the federal government deigned to bail out Wall Street but not Detroit. Supposedly, the mega-banks pose a systemic risk and Detroit doesn’t. On July 29th, former Obama administration economist Jared Bernstein pursued this line of reasoning on his blog, writing:
[T]he correct motivation for federal bailouts — meaning some combination of managing a bankruptcy, paying off creditors (though often with a haircut), or providing liquidity in cases where that’s the issue as opposed to insolvency – is systemic risk. The failure of large, major banks, two out of the big three auto companies, the secondary market for housing – all of these pose unacceptably large risks to global financial markets, and thus the global economy, to a major industry, including its upstream and downstream suppliers, and to the national housing sector.
Because a) there’s not much of a case that Detroit is systemically connected in those ways, and b) Chapter 9 of the bankruptcy code appears to provide an adequate way for it to deal with its insolvency, I don’t think anything like a large scale bailout is forthcoming.
Holding Main Street Hostage
Detroit’s bankruptcy poses no systemic risk to Wall Street and global financial markets. Fine. But it does pose a systemic risk to Main Street, local governments, and the contractual rights of pensioners. Credit rating agency Moody’s stated in a recent report that if Detroit manages to cut its pension obligations, other struggling cities could follow suit. The Detroit bankruptcy is establishing a template for wiping out government pensions everywhere. Chicago or New York could be next.
There is also the systemic risk posed to the municipal bond system. Bryce Hoffman, writing in The Detroit News on July 30th, warned:
Detroit’s bankruptcy threatens to change the rules of the municipal bond game and already is making it more expensive for the state’s other struggling towns and school districts to borrow money and fund big infrastructure projects.
In fact, one bond analyst told The Detroit News that he has spoken to major institutional investors who have already decided to stop, for now, buying any Michigan bonds.
The real concern of bond investors, says Hoffman, is not the default of Detroit but the precedent the city is setting. General obligation municipal bonds have always been viewed as a virtually risk-free investment. They are unsecured, but bondholders have considered themselves protected because the bonds are backed by the “unlimited taxing authority” of the government that issued them. Detroit, however, has shown that the city’s taxing authority is far from unlimited. It already has the highest property taxes of any major city in the country, and it is bumping up against a ceiling imposed by the state constitution. If Detroit is able to cut its bond debt in half or more by defaulting, other distressed cities are liable to look very closely at following suit. Hoffman writes:
The bond market is warning that this will make Michigan a pariah state and raise borrowing costs — not just for Detroit and other troubled municipalities, but also for paragons of fiscal virtue such as Oakland and Livingston counties.
However, writes Hoffman:
Gov. Rick Snyder dismisses that threat and says the bond market is just trying to turn Detroit away from a radical solution that could become a model for other struggling cities across America.
A Safer, Saner, More Equitable Model
Interestingly, Lansing Mayor Virg Bernero, Snyder’s Democratic opponent in the last gubernatorial race, proposed a solution that could have avoided either robbing the pensioners or scaring off the bondholders: a state-owned bank. If the state or the city had its own bank, it would not need to borrow from Wall Street, worry about interest rate swaps, or be beholden to the bond vigilantes. It could borrow from its own bank, which would leverage the local government’s capital into credit, back that credit with the deposits created by the government’s own revenues, and return the interest to the government as a dividend, following the ground-breaking model of the state-owned Bank of North Dakota.
There are other steps that need to be taken, and soon, to prevent a cascade of municipal bankruptcies. The super-priority of derivatives in bankruptcy needs to be repealed, and the protections of Glass Steagall need to be restored. While we are waiting on a very dilatory Congress, however, state and local governments might consider protecting themselves and their revenues by setting up their own banks.ELLEN BROWN is an attorney and president of the Public Banking Institute. In Web of Debt, her latest of eleven books, she shows how a private banking oligarchy has usurped the power to create money from the people themselves, and how we the people can get it back. Brown’s latest book is The Public Bank Solution. Her websites are http://WebofDebt.com, http://EllenBrown.com, and http://PublicBankingInstitute.org.